‘Evidence, not politics’ urged for pipelines

CALGARY Federal politicians should not be able to veto National Energy Board decisions on pipelines, a Senate interim report looking at the approval process recommended Wednesday.

“We believe the government’s ability to overrule the NEB should be restricted,” said Sen. Michael MacDonald from Nova Scotia.

He is the deputy chair of the Senate Standing Committee on Transport and Communications, which has been touring the country this year in preparation for a report on how to improve Canada’s regulatory process for pipelines.

In its report, the committee made seven recommendations on “how the government can restore legitimacy to the pipeline approval process.”

A review of the NEB’s processes and mandate is already underway following Natural Resources Minister Jim Carr’s appointment of a review panel last month.

The report’s recommendations include appointing a permanent indigenous member to the NEB, enhancing the Canadian Coast Guard and removing the federal cabinet’s final approval of pipeline projects.

“Evidence, not politics, should dictate how we proceed with pipeline expansion, so we recommend removing the government in council’s final approval of pipeline projects,” MacDonald told reporters in Ottawa.

In place of cabinet’s decisionmaking authority, the report recommends a system in which “NEB decisions would be subject to appeal to the Governor in Council, similar to some licensing decisions by the Canadian Radio-television and Telecommunications Commission.”

Macdonald-Laurier Institute managing director Brian Lee Crowley said the fact that politicians have the final decision on pipeline approvals was a mistake of the previous Conservative government.

“When you have a system in which (the prime minister) has the final say, then he owns every decision,” Crowley said during an interview.

Crowley has advocated for a return to a regulatory system for pipelines in which a regulator owns the final decision.

In the same way the courts are free from political interference and not subject to political decisions, he said, industry regulators should be free from political decisions.

“Who is to set the rules and then who is to apply them?” Crowley asked, adding that cabinet’s job is to pass laws and set rules, then allow courts or quasi-judicial organizations like the NEB to be free to apply the rules.

MacDonald said the report came to its recommendations on the basis that Canada needs to build new pipelines for export beyond the U.S. in order to reduce the discount domestic producers are forced to accept for their barrels at U.S. refineries.

“To us and to many Canadians, it is crystal clear that we need more pipelines in Canada,” MacDonald said.

He said that 97 per cent of Canadian oil exports are shipped to a single market, the United States, “a country which is itself blessed with abundant oil.”

“Pipeline construction is an economic imperative — full stop,” MacDonald said during an interview. He added that new markets are needed for domestic oil shipments.

The government approved the Trans Mountain pipeline expansion project last week and the Line 3 replacement project, which will add 960,000 barrels per day of oil export capacity to Canada’s existing pipeline networks.

It also dismissed Enbridge’s Northern Gateway project to the West Coast, which would have added 525,000 bpd of take-away capacity.

The Senate committee released its report on the same day that New York-based Natural Resources Defense Council warned traffic in U.S. waterways from tankers carrying heavy oil from Canada would increase 12-fold following Ottawa’s approval last week of Kinder Morgan’s Trans Mountain pipeline expansion and Enbridge Inc.’s Line 3 project.

In a news release, NRDC policy analyst for the group’s “Canada Project” Joshua Axelrod said, “Canadian oil producers have a scheme to flood us with dangerous tarsands oil” by shipping crude along both U.S. coasts and along the Mississippi River.

“The risks and costs created by possible tarsands spills are so substantial that local, state and federal governments should take immediate action,” Axelrod said.